DAILY TRADING ADVISORY 18-September-2009
Housing Starts at the highest in the last nine months, Initial Claims lower than expected and Philadelphia Fed higher than expected gave way to new highs and a flat close.
ECONOMIC DATA
None
YESTERDAY’S MARKET
After trading at new highs during the Globex session, the E-mini SP started the day at 1062.50 and moved up to 1065.00. With the markets waiting for the release of the Philadelphia Fed Index, the SP backed off to 1062.50. Then, it bounced once more to the intraday highs and continued higher reaching 1070.50. The SP pulled back to 1066.00 just to bounce once more to 1069.50, after failing to make a new high, the SP pushed down to 1062.50. Once more, markets held and the index moved higher to 1069.00. Markets continued to fluctuate offering trading opportunities on both sides, the SP sold off to 1059.75 where buyers stepped back pullback, thin pushing the index up to 1063.00. The bounce failed and the SP made a new low at 1056.25, however, the index held and slowly recovered to a neutral position reaching 1064.50 before pulling back into the close. For the day, the SP lost .75 points and settled at 1062.75, the Nasdaq gained 2.25 points finishing the day at 1720.00 and the Russell added .60 points closing the day at 614.50. The Dow closed marginally lower by 7 points at 9783.
MARKET COMMENTARY AND OUTLOOK
During the last two weeks I wrote that if the SP was able to close during two consecutive sessions above the 1040.00 area, the next levels, at 1068.00-1070.00 would probably get reached.
It was real easy for that market to move forward reaching its next upside objective, two consecutive days, in a slow but a solid manner, the SP moved higher and reached my upside objective.
What is next, first of all, everything indicates that the SP will continue to push upward on its way to close an open gap from last October, that gap is around the 1102.00 area; second, yesterday, after been trading only to the upside for nine days, the rally stalled, once the objective was reached, markets fluctuated and closed moderately lower. Is Friday’s option expiration the reason to take some chips off the table? Or is it that the markets may see some consolidation before they try to close the open gap? Or we have a short term top?
There is no evidence that the uptrend has ended, there is no evidence that the trend has changed and the markets will move lower, there is only a one day negative session with moderate losses, so there is no reason to stop buying the dips.
Today, an option expiration day, end of trading quarter, I personally avoid day trading, I may stay on the sidelines during the session, everything could happen, early in the morning when the futures expired we could see a reversal from the preopening trend, later, as the day pass, some volatility if the expiration is not priced yet, and with the Jewish New Year festivity starting Friday’s night, many traders will surely leave at noon, so take it easy, if you are lucky enough to take some early profits, call the week and go to rest. Tip: try to be long above the 1064.00 area on the SP and 1722.00 on the NQ.GOOD LUCK
TODAY’S SESSION
There is resistance at 1065.50-1067.00 on the SP, 1723.00-1725.00 on the Nasdaq and 615.50-616.40 on the Russell, if those get exceeded try to maintain a long position as the next levels at 1070.75-1071.00 on the SP, 1729.00-1731.00 on the Nasdaq and 620.00-620.20 on the Russell may get tested. If the bounce stalls there posting double tops at yesterday’s highs, look for sellers to try and push lower, but if those do not hold the end of week buying pressure expect the indexes to post another positive session reaching 1076.00-1078.00 on the SP, 1739.00-1740.50 on the Nasdaq and 625.40-626.70 on the Russell.
There is support at 1061.00-1059.00 on the SP, 1718.00-1716.00 on the Nasdaq and 612.60-611.60 on the Russell. If those fail, look for stronger support at 1055.00-1054.00 on the SP, 1711.00-1709.50 on the Nasdaq and 609.10-607.40 on the Russell. Holding there may give way to a bounce of 8.00-10.00 points on the SP, but if those fail, then a strong negative session may be seen.
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TODAY’S SUPPORT, PIVOT AND RESISTANCE LEVELS |
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|
S&P |
NASDAQ |
RUSSELL |
|
Resistance 4 |
1081.00-1083.00 |
1757.50-1750.00 |
629.80-630.40 |
|
Resistance 3 |
1076.00-1078.00 |
1739.00-1740.50 |
625.40-626.70 |
|
Resistance 2 |
1070.75-1071.00 |
1729.00-1731.00 |
620.00-620.20 |
|
Resistance 1 |
1065.50-1067.00 |
1723.00-1725.00 |
615.50-616.40 |
|
PIVOT |
1063.50 |
1721.00 |
615.00 |
|
Support 1 |
1061.00-1059.00 |
1718.00-1716.00 |
612.60-611.60 |
|
Support 2 |
1055.00-1054.00 |
1711.00-1709.50 |
609.10-607.40 |
|
Support 3 |
1051.00-1050.00 |
1702.50-1701.00 |
604.60-603.50 |
|
Support 4 |
1048.00-1047.50 |
1693.00-1692.00 |
599.20-598.80 |
|
S&P |
NASDAQ |
RUSSELL |
|
FIBONACCI |
FIBONACCI |
FIBONACCI |
|
1136.31 |
1808.06 |
664.7 |
|
1111.42 |
1778.28 |
647.7 |
|
1096.17 |
1760.03 |
637.3 |
|
1086.75 |
1748.75 |
630.9 |
|
1080.92 |
1741.78 |
626.9 |
|
1071.50 |
1730.50 |
620.5 |
|
1065.67 |
1723.53 |
616.5 |
|
1063.88 |
1721.38 |
615.3 |
|
1062.08 |
1719.22 |
614.1 |
|
1056.25 |
1712.25 |
610.1 |
|
1046.83 |
1700.97 |
603.7 |
|
1041.00 |
1694.00 |
599.7 |
|
1031.58 |
1682.72 |
593.3 |
|
1016.33 |
1664.47 |
582.9 |
|
991.44 |
1634.69 |
565.9 |
|
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DAILY PROJECTIONS |
|
S&P |
NASDAQ |
RUSSELL |
|
|
AS DAILY HIGH |
|
1067.00 |
1734.00 |
617.50 |
|
|
AS DAILY LOW |
|
1051.75 |
1716.00 |
607.10 |
